Voters in Colorado and Texas to Decide Divergent Tax Policy Measures This November

State Tax Policy Divergence on November Ballots

While national attention has focused on redistricting efforts, sources indicate voters in Colorado and Texas will decide significantly different tax policy measures this November that reflect broader fiscal trends. According to reports, Colorado’s Democrat-led legislature has referred two tax increase measures to voters, while Texas’s Republican-controlled government is proposing multiple new taxpayer protections.

State Tax Policy Divergence on November Ballots
Colorado’s School Lunch Program Funding Expansion
Details of Proposed Tax Increases
Concerns About “Bracket Creep”
Texas Moves to Strengthen Taxpayer Protections
Additional Texas Tax Limitations

Colorado’s School Lunch Program Funding Expansion

Colorado voters will consider Propositions LL and MM, both of which seek to expand taxation to permanently fund universal school lunch programs, analysts suggest. These measures build upon Proposition FF, which voters approved in 2022 to make all Colorado public school students eligible for taxpayer-funded school lunches regardless of household income.

The report states that Proposition FF funded the expanded program by limiting itemized deductions for taxpayers earning above $300,000 annually. Prior to its passage, Colorado had limited itemized deductions to $60,000 for joint filers with income exceeding $400,000 and $30,000 for single filers above that threshold.

Details of Proposed Tax Increases

Proposition MM, according to the analysis, would further tighten deduction caps established by Proposition FF. If approved, Proposition MM would reportedly lower itemized deduction caps from $16,000 to $2,000 for joint filers and from $12,000 to $1,000 for single filers. The tax hike imposed by Proposition MM is projected to raise $95 million annually on top of funds raised by the Proposition FF tax increase.

Proposition LL asks voters to exempt the school lunch program from Colorado’s Taxpayer’s Bill of Rights (TABOR), which limits state revenue growth and requires excess collections to be refunded to taxpayers. Analysis from the Independence Institute suggests Proposition FF collections have exceeded initial estimates by more than 11%, creating the impetus for Proposition LL.

Concerns About “Bracket Creep”

Analysts suggest the tax hikes enacted by Proposition FF, which Proposition MM seeks to expand, will affect an increasing number of Colorado residents annually because the $300,000 income threshold isn’t indexed for inflation. According to reports, this creates what policy experts describe as “bracket creep,” where inflation pushes more taxpayers into higher tax brackets over time without actual increases in purchasing power.

“They sell it as a tax on the wealthy, but every year, more working Coloradans will get swept into the net,” Nash Herman of the Independence Institute reportedly stated. Analysis suggests those earning $300,000 in 2025 have the same buying power as those making $274,253 in 2022 due to inflation.

Texas Moves to Strengthen Taxpayer Protections

Meanwhile, Texas voters will consider 17 propositions this November, many seeking to build upon previously enacted tax relief and prohibit new forms of taxation. According to reports, the Republican-led Texas legislature referred multiple constitutional amendments to the ballot earlier this year that would establish additional taxpayer safeguards.

Proposition 2 would specifically prohibit state taxation of capital gains, building upon Texas’s existing constitutional prohibition on state income taxes approved by voters in 2019. When signing the joint resolution referring the capital gains tax prohibition to the November ballot, Governor Greg Abbott reportedly said he expects voters to approve Proposition 2 and “ensure that we’re not going to have a capital gains tax in Texas.”

Additional Texas Tax Limitations

Proposition 6, if enacted, would reportedly amend the state constitution to bar imposition of financial transaction taxes, ensuring Texas remains a financial transaction tax-free zone. Proposition 8 would prohibit the legislature from imposing death taxes applicable to a decedent’s property or the transfer of an estate, inheritance, legacy, succession, or gift.

Policy analysts suggest the divergent approaches in Colorado and Texas reflect broader national trends in fiscal policy between states with different political leadership. The outcomes of these ballot measures could have implications beyond state borders, potentially influencing tax policy debates in other states with similar political alignments.

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